The Space Dream of Encryption Tycoons: Investing 1 Billion USD to Build a Commercial Space Station

The low-profile tycoons behind Mt. Gox and Ripple are investing heavily in building the world's first commercial space station.

Written by: Kiel Porter, Loren Grush, Bloomberg Businessweek

Compiled by: Luffy, Foresight News

Jed McCaleb has made a fortune in the cryptocurrency space, and now he is ready to invest a large portion of it into his dream of space.

This billionaire, who once founded the infamous Bitcoin exchange Mt. Gox and the cryptocurrency XRP, is independently funding an ambitious plan: to build the world's first commercial space station and send it into space.

If successful, his startup Vast Space LLC is expected to win a contract from NASA worth potentially billions of dollars next year to replace the International Space Station. McCaleb stated that if it fails, he is prepared to lose $1 billion. By the end of 2023, McCaleb controls billions of dollars in assets through two foundations, with the $3.3 billion in assets of the foundations all stemming from his personal donations.

"This is a crucial step for humanity to live beyond the planet in the future." At the company's headquarters in Long Beach, Calif., 50, McCaleb said, "Not many people are willing to invest as many resources, time, and risk as I do."

Since then, he has hired an industry veteran as CEO, and SpaceX is providing some technical support to Vast as well. At the same time, Elon Musk urged the United States to speed up the timeline for the retirement of the International Space Station, which is currently scheduled for the end of 2030. Founded in 2021, some of the components of Vast spacecraft incorporate technology developed by SpaceX, specifically the docking adapter used to connect the SpaceX Dragon spacecraft to the Vast space station, and the space internet system that provides Wi-Fi to the space station via Starlink. Vast has booked SpaceX's launch services to launch its hardware into orbit and send astronauts to the space station, and SpaceX has also agreed to deliver astronauts to Vast as long as NASA approves it.

However, this task remains daunting. From McCaleb's experience, it is hard to see him as the person capable of handling it. This boy from an Arkansas farm, a dropout from the University of California, Berkeley, has no background in the aerospace industry. His career is characterized by seizing opportunities in emerging technologies and then timely pivoting before government regulation and other adverse factors disrupt the industry. This short-term thinking seems to be at odds with the long-term focus required to win a high-stakes race to create technological miracles.

Vast is headquartered in Long Beach, Source: Bloomberg Businessweek

Sam Yagan is a friend of McCaleb and co-founded an online file-sharing company with him over twenty years ago. Yagan is now the co-founder and managing director of Corazon Capital, and he says that this entrepreneur is a thoughtful risk-taker. "He is very rational about these things," Yagan said, "but he is willing to take the enormous risks that you and I see, a bit unconventional."

Many employees at Vast have previously worked at SpaceX. The parking lot at the company headquarters is filled with cars produced by Tesla, a company owned by Musk. One of the Cybertrucks belongs to Max Haot, who joined Vast after McCaleb acquired his company in 2023. Since then, Haot has become the CEO of Vast, allowing McCaleb (who drives a more ordinary Model 3) to fly in from his home in San Francisco once a week to oversee project progress.

Before being acquired, Haot did not focus on the space station field. Instead, he tried to emulate Musk by founding another rocket launch startup, Launcher. The company received $30 million in investment and made progress in developing rocket engines and launch vehicles, but the two satellites built by Launcher encountered failures after entering space. In 2022, Haot met McCaleb while seeking investors.

McCaleb made a takeover proposal and agreed that Haot would serve as president, eventually CEO, of Vast Haot wasn't willing to accept the deal at first, but he changed his mind when he realized that Launcher was having trouble getting the money it needed.

Vast founder and chairman Jed McCaleb with CEO Max Haot at the testing facility in Mojave, California, Source: Bloomberg Businessweek

Vast's grand vision is not just to build the first private space station. The company also aims to develop an artificial gravity system to simulate Earth’s environment for future astronauts. This project is highly complex, requiring the use of centrifugal force to set up massive rotating modules in space. This proposal is quite appealing, as human experiences living and working on the International Space Station have shown that long-term exposure to a microgravity environment can impair various biological systems.

However, these are still far off. Currently, Vast needs to launch its first space station into orbit. The number of employees in the company has rapidly increased from less than 200 a year ago to 740, covering a wide range of talents from technical engineers to spacesuit manufacturers. Vast's headquarters operates 24 hours a day, with engineers and construction workers working in shifts, either expanding the Long Beach facilities or building Vast's first prototype space station, "Haven-1."

Space stations are a common element in popular culture, such as the Death Star from Star Wars and the space station of the same name from Star Trek: Deep Space Nine. The space station has also been an important part of U.S. space exploration since astronauts first boarded the experimental Skylab in 1973. Decades later, with the end of the Cold War, NASA partnered with countries like Russia to build a larger ISS. Since November 2000, there has always been at least one astronaut on board the ISS, who often studies materials and the behavior of the human body in a microgravity environment.

A technician from Vast's headquarters, source: Bloomberg Businessweek

Measuring approximately 33 feet (10 meters) tall and 14.5 feet (4.4 meters) wide, Haven-1 is designed to fit snugly into the nose cone of a SpaceX Falcon 9 rocket. The space station has about 1,600 cubic feet (45 cubic meters) of habitable space, which is about twice the size of the average RV. It will be equipped with a private sleeping pod, a large window, wood paneling, and a table for four people.

At least that's its goal. In January this year, the company began construction of Haven-1, which is scheduled to launch in May 2026, a delay from the originally planned August of this year. The company recently tested a prototype to confirm that its structure can withstand internal air pressure, and is developing key components for the power system, propulsion device, and other manned mission tasks. Its shell must be able to endure the harsh environment and temperatures of space, while also maintaining the air pressure and gases that humans are accustomed to on Earth.

"We are not yet a real space station company," Haot said, "we are an aspiring space station company."

The main structure of Haven-1 is awaiting further testing at Vast's Mojave base, source: Bloomberg Businessweek

Assuming all goes well, after the launch of Haven-1, Vast will send four astronauts into space on a Falcon 9 rocket to dock with the space station. If the first launch is successful, Vast plans to launch the first module of the next space station, Haven-2, by 2028. It will be the starting point for a larger base designed to replace NASA's International Space Station.

One of the biggest challenges will be to create an effective life support system. The International Space Station uses a regenerative system that recycles all wastewater into drinking water and converts carbon dioxide into breathable oxygen. Such a system is essential if passengers are to stay on the space station for an extended period, but Haven-1 will not be equipped with it, as astronauts are expected to stay for only a short duration. Vast plans to eventually equip Haven-2 with such a system, but it is anticipated that the space station will not have long-term occupancy in the initial years.

Competitors including Axiom Space, Blue Origin, and Voyager Space Holdings are also competing to build their own space stations, but one advantage for Vast is that McCaleb is willing to invest heavily in the project. "Vast is the only company that relies primarily on its own funds and is ready to go," said Chad Anderson, founder and managing partner of Space Capital, a firm focused on the aerospace industry. "In that regard, they are an interesting choice." (Anderson has no financial ties to Vast but has invested in SpaceX.)

Although these competitors have aerospace backgrounds and some launch contracts, they do not have such close cooperation with SpaceX.

Engineers are studying life support systems in the clean room at Vast headquarters, Source: Bloomberg Businessweek

McCaleb is eager to downplay any personal relationship, stating that he has met Musk "a few times, he probably doesn't remember me," even though both have invested in OpenAI. Despite their differences in approach and demeanor, there are many similarities in their respective interests and unconventional paths to wealth: both dropped out of school (Musk dropped out later), founded software companies in emerging fields, and turned their love for fantasy and gaming into financial success.

McCaleb's first project eDonkey was one of the earliest file sharing services on the internet and an early competitor to Napster. Founded in 2000, it allowed users to share music and movies for free, generating millions of dollars in revenue for the company each year through advertising. In 2006, to avoid copyright infringement lawsuits, the company agreed to pay the Recording Industry Association of America $30 million and subsequently shut down.

McCaleb's next success was Mt. Gox, one of the world's first Bitcoin trading platforms. The site was founded by McCaleb in 2010, and a year later, he sold a majority stake at an undisclosed price. In February 2014, the exchange went bankrupt, and users lost more than $400 million worth of Bitcoin at the time, the largest crypto disaster in history before the collapse of FTX in 2023. Although McCaleb remains a minority shareholder, he has not been sanctioned and said he also suffered losses in the disaster.

At that time, McCaleb had already begun his next project: XRP, the cryptocurrency on the Ripple protocol, of which he was also a co-founder. McCaleb originally held 9% of XRP. After a disagreement with his co-founders, he left the company in 2013 but retained his XRP and gradually sold it over the following years. According to analysis by XRPScan, during the cryptocurrency boom at the end of 2017, the value of XRP skyrocketed, eventually inflating to a market capitalization of $130 billion in January 2018. McCaleb earned approximately $3.2 billion from selling XRP and Ripple equity between 2014 and 2022.

"He is one of the ten most important founders in the cryptocurrency space, although few people really know him," said Nic Carter, founding partner of Castle Island Ventures, an investment firm focused on public blockchains. "Interestingly, most of the other important figures are those flamboyant, high-profile, and extravagant individuals."

Despite achieving great success, McCaleb's social circle is quite small, mainly collaborating with Yagan and other long-term partners. He has a house in the surfing paradise of Costa Rica, another residence in Berkeley, and owns his own private jet.

McCaleb provides a stable source of investment for the often volatile aerospace industry. In this field, once-promising startups frequently fail due to a lack of funding. Although a former employee has filed a lawsuit alleging that Vast attempted to cut corners, the company does not seem to have negative news like SpaceX. Its billionaire CEO spends most of his time at home with his wife and three children, rather than trying to fight against the federal government.

Haven-1 at Vast's testing facility, Source: Bloomberg Businessweek

If McCaleb's plan succeeds, Vast has already booked multiple crewed missions with SpaceX to send astronauts into orbit, and both McCaleb and Haot have expressed their willingness to take these flights. "As a child, I spent a lot of time exploring outdoors, looking up at the sky, marveling at its wonders," McCaleb said. But all of this first depends on whether the company can win the final contract for the NASA program, which aims to kickstart a commercial space station project that could replace the International Space Station. The plan has a soft assurance that NASA will purchase time and space on any space station that goes into orbit. This contract is expected to be signed by mid-2026.

Haot said that without a contract from NASA, the commercial viability of any space station is questionable. "Winning this competition is a matter of our survival."